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| Edited By: Archana Shukla |Source: |Updated: Mar 16, 2018, 02:24 AM IST
Says the demanded price of $120 million is unjustifiable
MUMBAI: Bangalore-based manufacturer of medical diagnostics and interventional products, Opto Circuits, has cancelled its plan to acquire the European company citing the demanded price to be unjustifiable, the company said in a statement to the Bombay Stock Exchange.
Opto had signed a letter of intent (LoI), last month, for the proposed purchase of 100% of the Europe-based privately held medical devices company, specialising in patient monitoring equipments. The acquisition was estimated to be about $100 million.
Bodapati Bhaskar, chief financial officer of Opto said, “The demanded price for the company came as a surprise to us and is not compatible to the returns we expect out of the company.” The firm was quoting a price of $120 million.
It was only after signing the LoI did Opto got to know of the European counterpart’s valuations.
“A company should be able to recover the acquisition cost in three years time, otherwise it’s unviable and the European acquisition did not look sound for us now,” Bhaskar said.
This is notwithstanding the valuable and synergistically complementary that its business brings to Opto Circuits. Bhaskar said although Opto has pulled out of the deal from its side, it will reconsider if the European firm comes back with a price lower than $100 million.
The proposed acquisition would add to Opto’s range of critical care and cardiac care equipments.
The company has been on an acquisition spree in the past 2-3 years to keep expanding in this hi-end segment.
The company is on a lookout for more targets.
Opto had bought US-based Criticare Systems Inc for about $70 million earlier this year, which gave it a presence in non-invasive equipment such as vital sign monitors, anaesthesia monitors and pulse oximeters. Opto had acquired German stent manufacturer Eurocor in 2006 for a consideration of Rs 609 million.
